C&AG: Cancelled asylum seeker accommodation agreements led to 'substantial loss' for taxpayers 

In the wake of a new government being formed in January 2025, a decision was taken in mid-2025 not to proceed with most of the pre-contract agreements made in 2024 for the provision of asylum seeker accommodation. File picture 

There was a “substantial” loss to the taxpayer through agreements with potential providers of accommodation for asylum seekers, according to a report by the Comptroller and Auditor General (C&AG).

The Department of Children entered into pre-contract agreements with 15 potential providers, beginning in May 2024, to help prepare premises for housing asylum seekers.

This gave rise to “significant contingent liabilities” for the Exchequer, the C&AG said, which should have been disclosed formally in 2024, and should have required sign off from the Department of Public Expenditure.

The Department of Public Expenditure also said it was only notified of legal cases taken by five of the providers when mediation had already been scheduled — months after the justice minister agreed to mediation.

The department sought expressions of interest in April 2024 to source suitable properties as international protection accommodation. 

The 15 properties that eventually entered into pre-contract agreements “did not emerge” from the expression of interest process, the C&AG said.

The agreements aimed to provide security for potential accommodation providers, and help the department “in delivering on its goals and meeting its requirements under EU legislation”.

In the wake of a new government being formed in January 2025, a decision was taken in mid-2025 not to proceed with most of the pre-contract agreements.

Five legal cases were initiated against the Department of Justice by the parties of the pre-contract agreements.

The department said the potential “combined value” of the agreements was more than €100 million.

Settlements were reached in three cases following mediation; the Department of Justice has made “substantial” payments in 2026 as a result of the settlements but the C&AG noted they were “significantly less” than the estimated contract values.

Plaintiff costs remain outstanding for agreement and payment, and their estimated value has not been provided for in the 2025 account, the C&AG noted.

Legal proceedings are continuing in two other cases, which are expected to be heard in the Commercial Court.

“The expenditure related to the termination of the pre-contract agreements represent payments for which no value has been obtained and represents a substantial loss to taxpayers,” the report said.

'Lack of clarity' on DEA payments

In a separate chapter of the report on public services, the C&AG said there was “no formal agreement” between the departments of Justice and Social Protection about the administration of the daily expenses allowance (DEA) scheme, which “can lead to a lack of clarity” on entitlements and implementation.

The DEA is a weekly income support payment for asylum seekers living in or awaiting IPAS accommodation.

The Department of Justice has also not collected contributions from any IPAS accommodation resident, and there is no system in place for its collection.

Based on legislation, an asylum seeker who earns more than €97 a week is required to contribute to the cost of their accommodation and services.

The report said there were approximately 15,000 adults in IPAS accommodation who were not in receipt of the DEA, and that it was “probable that a significant number of these would have income at a level that would require a contribution to be made”.

“If 1,500 IPAS residents were required to contribute at the lowest rate of €15 per week, this would amount to €1.17mi in foregone contributions each year,” it said.

“Work to introduce a contribution model is underway,” the Department of Justice’s accounting officer said in response.